Question

Suppose you deposit $2,454.00 into an account today. In 6.00 years the account is worth $3,868.00. The account earned ____% per year.

Answer 1

Answer:

Interest rate, R = 26%.

Explanation:

Given the following data;

Principal = $2,454.00

Simple interest = $3,868.00

Time = 6 years

To find the interest rate?

Mathematically, simple interest is calculated using this formula;

$S.I = \frac {PRT}{100}$

Where;

• S.I is simple interest.

• P is the principal.

• R is the interest rate.

• T is the time.

Substituting into the equation, we have;

$3868 = \frac {2454*R*6}{100}$

Cross-multiplying, we have;

$3868 * 100 = 14724*R$

$386800 = 14724R$

$R = \frac {386800}{14724}$

Interest rate, R = 26.27 ≈ 26%

Therefore, the account earned 26% per year.